Why aren’t we taught this at school?

Use the player icons above to listen on your favourite podcast app, or read the full transcript below.

This podcast isn’t personal advice. If you’re unsure what’s right for you or the child, seek financial advice. Pension, ISA and tax rules can change, and benefits depend on personal circumstances. Investments can fall as well as rise in value, so the child could get back less than you invest.

Full podcast episode transcript

[0:00] Helen Morrissey: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown. I’m Helen Morrissey, and I’m Head of Retirement Analysis.

[0:07] Clare Stinton: And I’m Clare Stinton – Senior Personal Finance Analyst. Thank you for joining us!

[0:12] Helen Morrissey: So, Clare, what are we gonna be talking about today?

[0:14] Clare Stinton: Today, our episode is titled, ‘How to Raise Financially Savvy Kids.’ So, we’ll be covering why the early years matter so much, how to start talking money with the children in your life, as well as some practical tools – like savings and investment accounts – that can really set them up for the future.

[0:32] Helen Morrissey: You are right, Clare – the benefits of financial education, before reaching adulthood, are clear... it’s an area that is really gathering momentum.

[0:41] Clare Stinton: I couldn’t agree more, Helen. I’ve lost count of how many times I’ve heard, ‘Why aren’t we taught this in school when talking to adults about money?’ But the opportunity to learn isn’t just in the classroom – it’s in everyday life at home too, because daily life is littered with money decisions.

Interestingly, research shows that your money mindset is largely formed by the age of just seven. Now, your money mindset is the set of beliefs and attitudes that you carry about money – so how you earn it, spend it, save it, and even how comfortable you feel talking about it. And, if it’s formed by age seven, that means you’re learning from your immediate environment – family habits, family friends and conversations at the dinner table, cultural influences, community, religion can all play a role – so it really shows that small everyday moments matter.

[Pause]

[1:34] Clare Stinton: So, what was your earliest money-memory, Helen?

[1:37] Helen Morrissey: Right, so I am gonna take you back to the ‘80s – so this is gonna be a bit before your time, I must admit, Clare, and it’s gonna be about my NatWest Piggy Bank Family.

So, basically, the way it worked is that you opened an account with NatWest, as a child, and you were given your very first piggy bank, which was a baby pig, I think, called ‘Woody’ – and then, the...

[2:01] Clare Stinton: [Laughs]

[2:01] Helen Morrissey: ...way it worked was that... I think it was, every six months, you would be assessed on how much you’d saved – and, if you’d managed to save, I think it was £20 – or maybe £25 – in that six months, you would then get your next pig. So, the next one would be the sister – and then, the following six months, it would be the brother – then it would be the mum, and then it would be the dad once you’d reached £100.

So, I thought this was great – this was like a really big thing for kids at the time – and I wanted all of the pigs, but I wanted them as quickly as possible... I didn’t wanna have to wait another six months to get the pig if I hadn’t quite got enough. And so, what I actually went back and did was that I looked at how much pocket money I was getting – and I think I was getting about £1 a week, or something like that – and I soon worked out that I wouldn’t have much left over for other things if I just put all my money into my NatWest savings account – so, ‘What could I do that meant that I got some of the nice things that I wanted, plus getting that new pig every six months?’ And so, it meant that I actually went around, and I started doing chores – I was doing ironing for my brothers – and, you know, I got money for doing those chores – and what that then meant was that I hit all of my deadlines, I got my £100, and I got all my pigs in the quickest possible time.

So, I think that taught me a lot about budgeting, saving with a goal in mind – and I think those early lessons have really stayed with me throughout my life. How about you, Clare?

[3:35] Clare Stinton: That’s really interesting – the family of piggy banks worked as a real incentive there – you were a financial planner...

[3:41] Helen Morrissey: I was!

[3:41] Clare Stinton: ...from a young age! [Laughs]

So, mine also relates to pocket money, but it’s around actual coins. When I was younger, my granddad... whenever we went to visit him, he would get out this kind of plastic coin wallet that was shaped like a pentagon, and it held five £1 coins. So, I can really visualise him popping out the £1 coins, and handing my brother and I our pocket money... safe to say that most of that pocket money went on penny-sweets, but I think, even that activity – counting out those penny-sweets – working out that, if you didn’t spend one whole pound... so, by 100, you’d have some left over for later in the week, or the next weekend – it was very tangible.

Whereas, now we’re living in this largely cash-less world – and, whilst it’s really convenient for adults – it must make it much harder for children to understand money... where it comes from, how it works, it’s value – because it is increasingly invisible.

[4:34] Helen Morrissey: I would agree with that. So, you know, when money becomes digital, it can start to feel limitless if all you’re seeing is... you know, you just tap on the card reader and away you go.

I remember, again, like when I first went to university, and I started using debit cards for spending rather than cash... it did, actually, make me used to worry because I could see that I would be at increased risk of overspending, because I wasn’t seeing myself handing over cold, hard cash, basically. It can even feel limitless as you become an adult – especially if you are spending on credit – because there’s no visual consequence at the point of payment – you’re not seeing the amount of cash in your wallet disappearing.

[5:13] Clare Stinton: I agree. I remember tapping away on a student night – if you were out for drinks... it could be a bit dangerous – couldn’t it? – because you aren’t physically handing over the money.

So, Helen, what are some everyday moments that can actually help children build strong financial foundations?

[5:29] Helen Morrissey: So, first things first, we need to normalise talking about money, I think. It shouldn’t be a taboo subject – that just isn’t serving anybody to approach it like that – and there’s a lot of natural opportunities to introduce it in everyday life.

So, for instance, if you just look at the weekly shop... you know, it’s an opportunity to explain how you budget, why you might choose one product over another, or using your phone calculator to add up and show the total cost of the trolley of items as you put them in.

You can talk about where the money comes from, how you’re earnt it, and how you’ve decided to prioritise. A question as simple as, ‘We’ve got £10 for treats this week – how should we spend it?’ I think can really get children thinking – you know, weighing up the options, and making those decisions.

So, I’ve got young nieces and nephews, and we do talk about money. So, when they were very young, it could be as simple as giving them cash to spend on something, and getting them to work out how much change that they should...

[6:30] Clare Stinton: Mm.

[6:30] Helen Morrissey: ...expect back.

Now, they’ve got a little bit older, they’ve got these prepaid cards – and it’s about getting them to check if they’ve got enough money on them to cover what they want to buy.

[6:40] Clare Stinton: That’s a great example – and I think the key thing is, with all of those, they don’t feel like a lesson because they are just incorporated into everyday life.

Pocket money – as we’ve discussed already – can be a really simple, but powerful way to teach children about money – especially now that spending’s becoming invisible... so you’ve already mentioned those prepaid cards – but having that regular amount coming in can really help children to learn how to plan, make choices, and budget – but it also opens the door to conversations about saving, building habits that will matter far more later on – so when the goals shift from the latest toy to building an emergency fund, or perhaps even saving for a first home.

Research by the Money and Pensions Service found that 71% of children aged 7-17 are paying for things online, themselves. Now, I’d imagine this is likely to be via apps for gaming, as well as music, clothes – but this really highlights how quickly children are entering the digital-money world.

As children get older, it’s worth thinking about the tools that reflect that shift, and how you can use those to help aid their understanding of money. So, we’ve already mentioned a prepaid card, as well as debit cards – for example, you can really help them understand that you need money on those cards in order for them to make those digital or in-life purchases – and that, actually, that spending will mean that they will take on a bit more financial responsibility, whilst parents still remain in control.

It’s a safe, practical way to manage money – and you can even link it to chores, rewarding them with pocket money as they go. So, Helen, shall we share some conversation starters – some ideas for different ages?

[8:18] Helen Morrissey: Yeah, let’s do it.

So, I think, for younger children – and, by that, I mean those under about the age of 10... it’s all about making things visual and simple. So, I’ve mentioned food shopping, and maybe another idea might be to use jars or envelopes, for instance – and allocate one for spending, one for saving, and one for giving. This implants the idea of allocating money to different priorities and needs. You can also talk about tracers – you know, the whole, ‘If you buy this toy now, you won’t have enough for a bigger toy later’ – something that I speak to my nephew about fairly regularly! – ...

[8:54] Clare Stinton: [Laughs]

[8:55] Helen Morrissey: ...this will help them learn about the different trade-offs that they need to negotiate. Then, I think, as they get older, you can start to go a little bit deeper with them... you know, introducing things like budgeting for socialising with friends when they start their first job. This is also a pivotal moment to talk about online safety, I think – in particular, scams – and being cautious of things that may be too good to be true.

[9:18] Clare Stinton: Yes – Helen, that’s a really important point. Equipping older children with financial know-how is one of the best forms of risk management. It can help prevent them jumping on the latest social media driven trend – whether it’s meme stocks, a crypto craze, or even fraudulent online shopping.

[9:36] Heen Morrissey: Those later teenage years... I think a really pivotal point is that they might be entering the world of work – they’ll be earning a bit more money and enjoying a bit more financial freedom.

What d’you reckon is another useful conversation starter, Clare?

[9:50] Clare Stinton: Well, a worthwhile chat (if you’re feeling brave) with your teenagers is using moments like the Budget, or the end of the tax year, to start bringing in the bigger picture and how it trickles down to everyday life. So, you can really draw on what’s happening around you.

An example, right now, is that you could talk about oil prices, and how events happening thousands of miles away can feed into costs here at home. Suddenly, it makes sense why you aren’t taking as many daytrips in the car, or why bills have suddenly gone up.

Now, that can be a really simple way to introduce ideas like globalisation and the wider economy, but in a way that still feels relevant because it connects directly to their world and what they see at home.

Helen, what would you say is the most important lesson for children to learn early on?

[10:40] Helen Morrissey: For me, I would say it’s the importance of budgeting. So, I’ve mentioned earlier on, my NatWest Piggy Bank story, and how I really made the most of my money to reach my goal.

Now, this served me really well when I got into my teens and I was working part-time jobs. So, I knew that I wanted money for the here and now, but I was also saving to go university, and the money I was able to set aside... even though it wasn’t very much, it did give me that all-important safety buffer, as I got used to paying rent and bills, and it really made a huge difference.

[11:14] Clare Stinton: And, for me, it’s the lifelong balancing act of enjoying life today, as well as making sure you look after ‘You of the Future.’ So, really spreading your money across short-term needs and wants as well as your long-term needs – and, growing up, we all probably hear some version of, ‘Save everything’ versus, ‘Live your best life now’ – or, more commonly today, using ‘YOLO’ (you only live once) to book that last-minute trip with friends, or go out for dinner – but, in reality, the sweet spot sits in the middle – and that doesn’t change, so it is really useful to learn early on.

[11:50] Helen Morrissey: It all points to the importance of having that plan – doesn’t it? – and checking in on your progress every now and again, just to make sure that you’re still on track.

[11:58] Clare Stinton: Absolutely.

Now, let’s move onto something I’m sure our listeners are very aware of – because you simply can’t escape the headlines at the moment – and that’s all about the financial challenges young adults are facing – higher university costs and the debt that follows, tough job market, and surging house prices making it tricky to get onto the property ladder.

[12:17] Helen Morrissey: You’re right, Clare – there is a spotlight on all of these issues at the moment, and that is leading to a lot more talk about how the generations above can help the generations below.

For those that can afford to tuck away a little bit more money for little ones, it can make a real meaningful difference to them. A nest egg could be handed over at a pivotal moment to help contribute to a first car, education, or even a first home.

[12:42] Clare Stinton: And there’s also a mental and emotional side to this. So, financial milestones – like buying a first home – are so ingrained, socially – but, for many young adults, these goals may feel increasingly out of reach.

According to Unbiased, the average first-time buyer deposit now sits at a whopping £63,855 for those buying in England. In Northern Ireland, it’s around £40,500 – whilst, in Wales, buyers are stumping up around £35,500 – and, Scotland, it’s about £30,500.

Now, investing for children can give them a financial leg-up towards these goals. Investing for them early on gives them a really powerful advantage – time. Compounding can do a lot of the heavy lifting, and that’s where you earn returns on past returns. The longer your time horizon, the greater the potential impact.

[13:39] Helen Morrissey: They are some really eye-popping figures there – aren’t they? – for first-time buyer deposits... that’s absolutely huge – but, as you say, compounding can turn even modest contributions into something meaningful.

And I think that brings us nicely onto some of the tools available. We’re gonna run through a few of the investment accounts available – so, Clare, d’you wanna start with the Junior ISA?

[14:02] Clare Stinton: Yes – so the Junior ISA (or ‘JISAs,’ as they’re fondly known) is a really valuable option for families – it’s a tax-free savings and investment account for children. Once opened by a parent or legal guardian, anyone – including grandparents, extended family, friends – can contribute regularly, or as one-off gifts for birthdays and holidays. You can invest up to £9,000 each tax year, and all the growth is free of UK Income Tax and Capital Gains Tax.

The money in a JISA is normally locked away until the child reaches 18 – generally a good thing from an investing perspective... it gives plenty of time to ride the ups and downs of the stock market, and for compounding to work its magic. For example, investing the full £9,000 per year from birth could provide a nest egg of around £255,000 by age 18, if we assume a 5% annual investment return.

Now, this calculation doesn’t take into account inflation or investment charges – and I do need to say that investment returns are not guaranteed. If you’re investing for five years or more, that increases your chances of positive returns compared to cash savings, but your child could get back less than you invest.

At age 18, it transfers to an ordinary adult Stocks and Shares ISA, and the ownership moves to the young adult – so they can begin to withdraw money, at this stage, if they wish.

[15:21] Helen Morrissey: That is an incredible figure there – isn’t it? - £255,000, as a potential – but I do know that there is a concern among parents in handing over a significant sum of money to an 18-year-old, who’d have full control over it and be able to spend it on whatever they want.

[15:38] Clare Stinton: Yes, we do hear that – but, interestingly, our data showed something really promising. It suggested young adults are not rushing to splash the cash. Actually 85% of HL clients, whose JISAs matured in tax year 2024-’25, still have money invested a year later – and just over one in four of those chose to top up in the year after maturity. So, while the fear may be that it all gets spent travelling – or having a really good time – the reality is often more responsible.

JISAs can be more than just a nest egg – they can also be a teaching tool. So, talking to your child about the contributions that you make to their JISA, and how they are invested, can teach them important lessons about stock market volatility, the power of compounding, as well as taking a long-term approach – and all of that builds understanding and confidence.

[16:28] Helen Morrissey: It is worth pointing out that, if your child has a disability – and may not be able to manage the money, themselves – then accessing money in a Junior ISA may be trickier. So, in some scenarios, this can involve the parent applying to the Court of Protection, or having a Lasting Power of Attorney in place, which might come with a cost attached. We have seen similar issues with Child Trust Funds.

Another option for parents is to consider saving under their own name, using their ISA allowance. This would allow you to keep control over when and how it’s passed over.

[17:04] Clare Stinton: Yes – and the mention of Child Trust Funds... Some young adults – so those aged between 18 and 23 – might have a Child Trust Fund. So, Child Trust Funds were set up for Generation Zoomers who were born between 1^st September 2002 and 2^nd January 2011 – each receiving a government contribution of at least £250.

Towards the end of last year, the government data shows around 750,000 matured Child Trust Funds, worth an average of around £2,240, were sitting waiting to be claimed. So, if one belongs to you, that’s a sizeable sum of cash sitting idle – money that could be working harder for you.

The good news is that tracking down a lost Child Trust Fund is straightforward and can take as little as 10 minutes. You just need head to the government website, log into the Gateway, complete the form – and, if an account is located, you’ll be able to access the money with proof of your identity.

Now, over to you, Helen, to shock us with the magic of the Junior SIPP – because, if you thought the Junior ISA figures were impressive... well, the maths is pretty compelling stuff, isn’t it?

[18:07] Helen Morrissey: That’s absolutely right, Clare. So, starting early, you could make your little one a millionaire in retirement.

[18:13] Clare Stinton: Wow!

[18:14] Helen Morrissey: So, you can normally save up to £2,880 a year into a Junior SIPP – this is then topped up to a maximum of £3,600, by the Government, in the form of basic rate tax relief at 20%.

Now, if you’d contributed the maximum each year – from birth to the age of 18 – the pot would be worth close to £100,000... now, this is assuming 5% investment growth a year. If that money was left untouched, it could be close to a whopping £1m by the time your child turns 65 – but, if they continue to contribute throughout their working life, then, really, the sky is the limit.

Now, it’s worth saying that these calculations are just an illustration and don’t consider investment charges or inflation. Junior SIPPs must be opened and managed by a parent or guardian and then control would pass to the child when they turn 18 – although they wouldn’t normally be able to access that money until later life... so it’s age 55, currently, but it will rise in the future.

Like an ISA, other family members can also contribute. So, for grandparents, it could be a handy estate-planning tool – ‘cause, if they choose to use part of their £3,000 annual gifting allowance, then the contribution would be immediately exempt from Inheritance Tax.

[19:38] Clare Stinton: Absolutely mind-blowing figures there – and they really evidence the impact of compound growth over that long investment horizon.

Talking of grandparents, and passing down wealth, the final account we’re going to touch on today is a bare trust.

[19:54] Helen Morrissey: Yes – so a bare trust can support inheritance-tax planning. By putting the money in trust, it often reduces the value of an estate – and, in turn, any inheritance tax bill that might need to be paid by loved ones in the future. Given our higher-tax environment, this may be attractive to grandparents looking to pass on wealth.

They can also be attractive for grandparents who would like to be able to set up the account and control the investment decisions. With no limits on contributions, you can pay in as much as you like, and any tax usually falls upon the child... this means that there’s often little or no tax to pay. There is, however, an exception to this rule. If the income generated from gifts from a parent exceeds £100 per year, then any income is then taxed as the parent’s income and not the child’s, so that’s important.

The child is automatically entitled to what’s in the bare trust at 18 – however, access before 18 is possible, provided the trustees can demonstrate that the withdrawal is for the benefit of the child – so an example would be buying their first car, for instance, or musical instruments.

[21:03] Clare Stinton: Thanks, Helen.

It’s also worth saying that trusts can be complex, so it’s an area where you could benefit from seeking advice to really understand your financial, legal, and tax position.

[21:15] Helen Morrissey: So, that’s all for this week. Before we go, we should remind you that this was recorded on April 29^th 2026, and all information was correct at the time of recording.

So, next week, Anna Macdonald and Matt Britzman will be back with an Investment episode.

[21:31] Clare Stinton: Nothing in this podcast is personal advice – if you’re unsure about what’s right for you and your circumstances, you should seek advice.

[21:40] Helen Morrissey: ISA, pension, and tax rules can change, and benefits depend on circumstances.

[21:45] Clare Stinton: Investments go up and down in value, so you could get back less than you put in.

So, all that’s left is for us to thank our Producer, Elizabeth Hotson.

[21:53] Helen Morrissey: And to thank you all, very much, for tuning in – and we’ll be back again soon. Goodbye!

[21:58] Clare Stinton: Bye!